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Confidentiality Agreement

The undersigned reader of WELLMEKAS Business Plan hereby acknowledges that the information provided is
completely confidential and therefore the reader agrees not to disclose anything found in the business plan
without the express written consent of WELLMEKA..

It is also acknowledged by the reader that the information to be furnished in this business plan is in all aspects
confidential in nature, other than information that is in the public domain through other means and that any
disclosure or use of the same by the reader may cause serious harm and or damage to WELLMEKA...

Upon request this business plan document will be immediately returned to WELLMEKA..

This is a business plan. It does not imply an offer of any securities.

__________________________________________________

Signature

__________________________________________________

Printed Name

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Overview

The long-term price decline of oil & gas is causing companies to increase production efficiency and yield
of wells in order to meet profit expectations. This often requires the introduction of new machinery to
increase capacity and petroleum engineering services to enhance yield efficiency. WellMeka specializes
in machinery rental and oil fields services designed to help wells operate more profitably in light of
continued price declines for the commodity.

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Table of Contents

Executive Summary ............................................................................................................... 5


Service Summary.................................................................................................................................. 6
Market Summary ................................................................................................................................. 6
Mission ................................................................................................................................................ 6
Three Year Objectives........................................................................................................................... 7
Keys to Success .................................................................................................................................... 7

WellMeka | Professional Oil Fields Services ........................................................................... 7


Product & Service Description............................................................................................................... 7

Industry Overview ................................................................................................................. 9


Market Needs ...................................................................................................................................... 9
Market Trends ..................................................................................................................................... 9
Market Growth .................................................................................................................................. 10
Market Segmentation......................................................................................................................... 11

Strategy & Implementation Summary .................................................................................. 12


Management Team ............................................................................................................................ 13
SWOT Analysis ................................................................................................................................... 15
Value Proposition ............................................................................................................................... 16

Competitive Comparison ..................................................................................................... 16


Marketing Plan .................................................................................................................... 16
Sales & Marketing Strategy................................................................................................................. 17

Financial Forecasts .............................................................................................................. 18


Startup Summary ............................................................................................................................... 18
Financial Highlights ............................................................................................................................ 19
Financial Indicators ............................................................................................................................ 20
Revenue Forecast ............................................................................................................................... 21
Projected Profit and Loss .................................................................................................................... 22
Break-Even Analysis ........................................................................................................................... 24
Projected Cash Flow ........................................................................................................................... 25
Projected Balance Sheet ..................................................................................................................... 26
Sensitivity Analysis ............................................................................................................................. 27

Appendix............................................................................................................................. 28
References .......................................................................................................................... 30

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Table of Figures

Figure 1: Organizational Chart ............................................................................................................................12


Figure 2: Post-Financing Expenses ......................................................................................................................16
Figure 3: Financial Highlights ..............................................................................................................................17
Figure 4: Financial Indicators ..............................................................................................................................18
Figure 5: Revenue Forecast .................................................................................................................................19
Figure 6: Profit & Loss .........................................................................................................................................20
Figure 7: Cash Flow .............................................................................................................................................21
Figure 8: Wages & Payroll ...................................................................................................................................22
Figure 9: Balance Sheet .......................................................................................................................................23
Figure 10: Scenario Analysis ................................................................................................................................24
Figure 11: Break-Even Analysis ...........................................................................................................................25
Figure 12: 12 Month Profit & Loss ......................................................................................................................26
Figure 13: 12 Month Cash Flow Statement.........................................................................................................27

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Executive Summary
Service Summary

WellMeka provides machinery rental and petroleum sector engineering services to oil fields within Africa.
Its main focus is the procurement, integration, and management of high pressure pumps (600 hp) that
will increase production yield of existing oil fields. The services will be implemented by Kenneth Emeka,
a senior level mechanical engineer that has client facing experience with additional contract help hired
as necessary. The business is seeking financing of $100,000 in order to cover asset purchases over year
one.

Market Summary

Nigeria has emerged as Africa's largest economy, with 2013 GDP estimated at US$ 502 billion. Oil has been
a dominant source of government revenues since the 1970s. Regulatory constraints and security risks
have limited new investment in oil and natural gas, and Nigeria's oil production contracted in 2012 and
2013 (CIA World Factbook, 2013). The total petroleum industry exports in Africa includes 8.4% of the
worlds proven reserves (93 Billion BBLS) that is currently facing tremendous challenges due to the global
price decline of WTI and Brent Crude Oil . The price has declined to 2008 levels with a 100% decrease in
the past year, driving many oil & gas companies into negative profits.

Mission

The mission of WellMeka is to help oil fields to operate profitably in any market environment by
improving the efficiency and production yield of their wells with the most professional team.

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Three Year Objectives

WellMeka has the following key objectives to reach its financial targets:

Acquire bank financing of $100,000 to cover expenses of initial operations.


Immediately acquire clients in the first month of operations to reach positive cash flows.
Maintain necessary procurement channels for pumps and rental equipment.
Pay back the loan with principle and interest within the agreed period.

Keys to Success

WellMeka recognizes the following keys to success that it should sustain:

Increase the production yield and efficiency of wells for oil fields by agreed rates.
Providing initial analysis, integration, and follow-up management support for pump installation.
Have good relationships with suppliers to receive pricing discounts with continued business.
Leveraging the reputation of Kenneth Emeka and his expertise in mechanical engineering.
Using case studies from previous wells to acquire new business and perform lead generation.

WellMeka | Professional Oil Fields Services

Product & Service Description

The company provides both equipment rentals and services aligned to provide analysis and
productivity/yield improvement for oil wells. The main service will be the installation and management
of high pressure pumps to increase production rates. Full offerings are categorized as follows:

Services

Production Services: The production services emphasize WellMakes main objective of productivity
enhancement. Services are provided through matrix simulation engineering and laboratory services:

Corrosion testing
Compatibility testing
Sludge/emulsion test
Filter cake test
QA/QC testing of acid

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General Pumping Services: The pumping services may be applied to increase access to proven reserves,
improve asset value, and overall ROI. Examples of services provided in this area include:

Matrix simulation treatment pumping


Well kill
Flow line pigging
Flow line purging and drying
Well lifting by nitrogen bull heading methods.

Drilling Services: The drilling fluid laboratory services include measurements and interpretation of
hydrocarbon phase behavior and fluid properties. Specific services provided include:

Fluid rheology testing


HPHT drilling fluid testing
QA/QC testing
Routine drilling fluid testing

Auxiliary Services: These services will be to provide additional support when needed for oil fields to help
them protect against operating below capacity. The typical auxiliary services include treating equipment
maintenance and nitrogen tank maintenance.

Tools & Equipment Rentals

Coiled Tubing Tools Rentals: Coil tubing is used for interventions in oil wells and production tubing in
some depleted gas wells. Rentals will be required with the well engineering intervention services as
projects are planned. The tubing requires many tools that WellMeka will provide as rentals:

Mill and motors


CT connectors
CT MHA
CT X-Overs
CT Nozzles
Centralizers

Equipment Rentals: This category includes heavy machinery that may be needed in order to scale the oil
wells capacity or required for fundamental operations.

Compressors
Generators
Tower Lights
Centrifugal Pumps
Baskets/Containers
Wilden pumps

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Industry Overview

The Gross Domestic Product (GDP) in Nigeria expanded 5.94 percent in the fourth quarter of 2014 over
the same quarter of the previous year. GDP Annual Growth Rate in Nigeria averaged 6.13 percent from
2005 until 2014, reaching an all-time high of 8.60 percent in the fourth quarter of 2010 and a record low
of 3.46 percent in the first quarter of 2012. GDP Annual Growth Rate in Nigeria is reported by the Central
Bank of Nigeria

Market Needs

It is highly likely that Nigerias GDP will continue to grow at 5 6% annually, which will require increased
capacity and efficiency of existing oil fields. New high pressure pump technology will enable wells to
increase their production rates, combined with the experienced analysis and support of an experienced
petroleum engineer. Oil fields consistently need new methods of improving output and maximizing ROI,
which WellMeka is designed to fulfill through its equipment rentals and professional oil fields services.

Market Trends

As the market price of oil declines, production yields must increase in order to sustain overhead and break-
even on fixed production costs. This is a long term trend that for a short period, has been exacerbated
through market manipulation from OPEC (The Economist, 2015). However, prices are slowing due to
increasing substitutes for consumption including natural gas as sustainable energy in major import
markets. As the price of oil continues to decline, oil fields are more pressured to invest in increasing

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production yields and operating more efficiently. Small investments in new pump technology and general
oil fields services can deliver a more substantial ROI in this atmosphere.

Market Growth

The size of Nigerias economy in 2013 is now put at US $510b. This makes it the largest economy in Africa,
overtaking South Africa by a large margin, and raises its GDP per capita to about US$2,700. The rebasing
puts growth in 2013 at 7.4%. However, until full data is available, we continue to estimate growth on the
previous basis. This shows GDP growth of 6.9% in 2013, a little above the rate in 2012.

With the oil sector subdued by the rise of shale oil and gas abroad, we expect growth to slow to 6.5% this
year, below the budget assumption of 6.8%. We forecast annual growth of 5%5.5% a year in 201518,
as the implementation of reforms slows ahead of elections in February 2015 and lower oil revenues weigh
on activity.

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Market Segmentation

There are two major areas in the oil industry, upstream and downstream. WellMeka focuses on the
upstream market segment, helping companies to increase their production and efficiency for greater
return on investment. Oil drilling and services may be divided into two areas of drilling and oilfield
services.

Drilling: Drilling companies physically drill and pump oil out of the ground. The drilling industry has always
been classified as highly skilled. The people with the skills and expertise to operate drilling equipment are
in high demand, which means that for an oil company to have these people on staff all the time can cost
a lot. For this reason, most drilling companies are simply contractors who are hired by oil and gas
producers for a specified period of time.

Land Rigs - Drilling depths ranges from 5,000 to 30,000 feet.


Submersible Rigs - Used for ocean, lake and swamp drilling. The bottom part of these rigs are
submerged to the sea's floor and the platform is on top of the water.
Jack-ups - this type of rig has three legs and a triangular platform which is jacked-up above the
highest anticipated waves.
Drill Ships - These look like tankers/ships, but they travel the oceans in search of oil in extremely
deep water.

Oilfield Services - Oilfield service companies assist the drilling companies in setting up oil and gas wells.
In general these companies manufacture, repair and maintain equipment used in oil extraction and
transport. More specifically, these services can include:

Seismic Testing - This involves mapping the geological structure beneath the surface.
Transport Services - Both land and water rigs need to be moved around at some point in time.
Directional Services - Believe it or not, all oil wells are not drilled straight down, some oil
services companies specialize in drilling angled or horizontal holes.

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Strategy & Implementation Summary

The strategy of WellMeka is to seek positioning against large companies that have higher overhead and
often send an inexperienced analyst to handle many contracts. By choosing WellMeka, clients work
directly with a senior level engineer and receive more competitive proposal prices due to the lower
overhead of WellMeka. The lower cost proposals are particularly attractive in the market with declining
prices for crude oil, which strengthens the competitive edge of WellMeka.
The company creates synergies within the services that it provides to generate profits from the clients
during the entire project life cycle. Fees are charged to clients for initial analysis, implementation, and
rental of the machinery required to fulfill project requirements. Ongoing relationships are then
established for management and continual optimization or auxiliary services provided.

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Management Team

John Doe Chief Executive Officer

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Susan Miller Chief Operating Officer


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Kevin Jones -Chief Financial Officer


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Adrian Wilcourt Legal Compliance


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Organizational Chart

Adrian
Board/Investors
Wilcourt/Legal

John Doe/CEO

Susan Kevin
Miller/COO Jones/CFO

Marketing
Sales Director Accounting
Director

Sales Reps Collections

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SWOT Analysis

Strengths

Lower overhead than most competitors, enabling more competitive project bids.
Kenneth has extensive experience developing proposals and facing clients.
Most assets are already in place to provide oil fields services.
The business model creates multiple revenue streams and long-term client relationships.
Most projects require ongoing quality evaluation of oil field operations.
Kenneth may build upon his existing client base from Schlumberger and their associates.

Weaknesses

There is currently not a large team in place compared to many competitors.


The company may have less case studies and brand awareness than older firms.
Some assets, such as a high pressure pump are needed, along with financing.
Taking on some debt can increase the financial leverage of the company, but manageably.

Opportunities

The price declines in the market create an immediate opportunity for entering.
The company is capital intensive and highly technical, forming barriers to entry.
Oil outputs are increasing for Nigeria and taking a larger percentage of exports.
The GDP growth rate in Nigeria has been growing very strong and expected to continue.

Threats

While there are plenty of oil companies, much of the oil and gas business is dominated by a
small handful of powerful companies.
The balance of power is shifting toward buyers. Oil is a commodity and one company's oil or oil
drilling services are not that much different. This leads buyers to seek lower prices and better
contract terms.
Long term market shifts may impact the overall profitability of oil wells in the next decade with
increasing substitutes available in natural gas and sustainable energy.

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Value Proposition

WellMeka is focused around increasing the production rate and efficiency of wells by providing oil fields
services within Nigeria and other African countries. The value proposition is solved by a three part
approach of initial analysis, equipment integration (if necessary), and follow-up integration.

Competitive Comparison

There are several companies providing oil fields services and independent petroleum engineers. However,
most companies only provide oil fields services within one business unit, sharing the overhead required
from the organization as a whole. Moreover, the lack of focus in any one function makes proposals less
powerful and results not as impactful as companies send out entry level analysts compared to working
directly with senior level consultants.

WellMeka is positioned in the market by utilizing its ability to operate with less overhead than larger
consulting firms and more focused than general oil & gas companies. Moreover, Kenneth will work directly
with clients to manage the project and fulfill needs ensuring that the person making the proposal will
be the same one responsible for implementing the project.

Marketing Plan

Marketing efforts will primarily consist of utilizing the existing network of managing partners and
approaching new companies to deliver proposals. Kenneth has experience from his work at Schlumberger
to formulate budgets and provide competitive bids. Relationships with non-competing consulting firms,
construction contractors, and downstream oil companies will also continue to be established so that
referrals may be acquired. The sales and marketing strategy is outlined in more detail in the following
section:

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Sales & Marketing Strategy

Personal Selling

The personal selling component will entail targeting leads of oil wells within Africa and visiting the
company to provide presentations of case studies, references, and proven added value. The purpose of
the personal selling initiatives are to close appointments set by researching the local target market.
Eventually, an inbound sales representative may be hired in order to help in the lead generation methods.

Strategic Partnerships

The strategic partnerships will focus around establishing relationships with companies that will result in
lead generation. This may be achieved by contacting companies who have regular exposure to oil fields,
but are not competing. For instance, some IT consulting firms may provide services to oil fields and offer
to refer clients for a fee to WellMeka. Other instances of partnership may be formulated with construction
companies, well machinery and equipment manufacturers, and government entities.

Customer Relationship Management

Targeted leads will be tracked through a CRM system such as Salesforce through the sales cycle and their
loyalty monitored. Strategies will be developed to maintain relationships with oil fields, which will mainly
by achieved by successfully achieving results and following up with cross-service opportunities, such as
ongoing management or auxiliary services after the implementation of a high capacity pump.

Website

An information based website will be developed that contains information about WellMeka, the complete
services offered, and overall competitive advantage that it yields. It will also feature the senior team, and
a brief explanation of the methodology approached in the market. The website may also be integrated
with social media channels as the company scales with videos for an increased reputation.

Sales Materials

Proposals will be developed on a project by project basis with a budget based on billable hours and specific
project requirements. Additional distinctive materials will include a quality company profile containing
similar information to the website, presentations for each service line that are professionally designed
that include a list of top clients and case studies of how WellMeka has delivered to the bottom-line based
upon its oil fields services.

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Financial Forecasts

WellMeka is requesting a $100,000 bank loan in order to mitigate risk from variations of revenue in the
first year of operations. Funds will be applied towards year one operating expenses and new asset
purchases. The company currently has $100,000 of cash on hand and property valued at $125,000
consisting of 1.2 acres. The startup summary includes new asset purchases in year one, which will take
place when the company has adequate cash flows to make the purchase. The loan has been calculated
over an 84 month period with an 11% interest rate and assets are conservatively depreciated over a 5-7
year period with a tax rate of 20%.

Startup Summary

Startup Expenses Startup Liabilities


Cash on Hand $200,000 Liabilities and Capital
Total Startup Expenses $200,000 Current Borrowing $0
Long-Term Liabilities $100,000
Startup Assets Accounts Payable $0
1.2 Acres of Property 125,000 Other Current Liabilities $0
300hp Fluid Pump 245,000
2X50 BBL blender 125,000
Startup Investments
C-Pump skid 54,000 Planned Investment
Base Setup 45,000 Owner $694,000
Total Startup Assets $594,000 Investor -
Total Planned Investment $694,000
Total Requirements
Total Startup Expenses $200,000
Startup Funding
Total Startup Assets 594,000 Total Liabilities $100,000
Total Requirements $794,000 Total Planned Investment 694,000
Total Funding $794,000

Startup
$800,000
$700,000
$600,000
$500,000
$400,000
$300,000
$200,000
$100,000
$0
Expenses Assets Investment Loans

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Financial Highlights

The financial highlights are how the company is projected to perform over the course of the next twelve months
and three to five years. The projections are based on comparable facilities based on estimated revenue range
and size, along with geographic location. We have assumed that for at least the first six-months of post-money
financing that expenses may be greater than revenues while the company invests into growth.

Financial Highlights ($000)


Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 2016 2017 2018
Revenue 69 78 88 108 138 148 214 244 194 184 197 202 1864 2940 4637
Gross Margin 67 76 85 105 134 144 208 237 188 178 191 196 1808 2851 4498
Operating Expense 36 39 42 48 57 60 83 92 77 74 82 84 774 1160 1741
EBITDA 16 23 29 43 63 70 110 130 97 90 94 98 863 1434 2371
Net Profit 4 9 14 25 41 47 79 95 68 63 66 69 581 1038 1789

Gross Margin/Revenue 97% 97% 97% 97% 97% 97% 97% 97% 97% 97% 97% 97% 97% 97% 97%
EBITDA/Revenue 0% 29% 33% 40% 46% 47% 51% 53% 50% 49% 48% 48% 46% 49% 51%
Net Profit/Revenue 0% 12% 16% 23% 30% 31% 37% 39% 35% 34% 34% 34% 31% 35% 39%

Net Cash Flow 15 21 17 41 61 36 109 129 30 89 93 42 683 1139 1889


Cash Balance - Ending 15 36 53 94 156 191 300 429 459 548 640 683 683 1822 3711

Projected Operating Highlights By Year ($000) Projected Revenues By Year ($000)


5000 5000
4500 4500
4000
4000
3500
3500
3000
2500 3000
2000 2500
1500 2000
1000 1500
500
1000
0
Year 1 Year 2 Year 3 500
0
Revenue Gross Margin EBITDA Net Profit Year 1 Year 2 Year 3

Projected Cash Flow By Year ($000) Projected Net Income By Year ($000)
4000 2000
3500 1800
3000 1600
2500 1400

2000 1200
1000
1500
800
1000
600
500
400
0
Year 1 Year 2 Year 3 200
0
Net Cash Flow Cash Balance Year 1 Year 2 Year 3

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Financial Indicators

The company believes that it can reach an increasing net profit margin due to economies of scale. Through
investments in capital expenditures, it may decrease its general and administrative expenses. Financial
indicators are based upon the performance of comparable companies in the same asset class, revenue
range and age both from publicly available information and our internal database of research.

Financial Indicators
2016 2017 2018
Profitability %'s:
Gross Margin 97% 97% 97%
Net Profit Margin 31% 35% 39%
EBITDA to Revenue 46% 49% 51%
Return on Assets 43% 43% 43%
Return on Equity 46% 45% 44%

Financial Indicators
120%

100%

80%

60%

40%

20%

0%
Year 1 Year 2 Year 3

Gross Margin Net Profit Margin EBITDA to Revenue Return on Assets

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Revenue Forecast

Revenue Forecast
2016 2017 2018
Revenue Forecast
Service Revenue $ 1,008,000 $ 1,612,800 $ 2,580,480
Product Sales $ 815,000 $ 1,263,250 $ 1,958,038
Reimbursable Revenue $ 41,000 $ 63,550 $ 98,503
Total Revenue $ 1,864,000 $ 2,939,600 $ 4,637,020

Direct Cost of Revenue


Service Revenue $ 30,240 $ 48,384 $ 77,414
Product Sales $ 24,450 $ 37,898 $ 58,741
Reimbursable Revenue $ 1,230 $ 1,907 $ 2,955
Subtotal Cost of Revenue $ 55,920 $ 88,188 $ 139,111

Revenue By Year
5000

4500

4000

3500

3000

2500

2000

1500

1000

500

0
2016 2017 2018

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Projected Profit and Loss

The profit and loss assume that the company will have margins at a comparable level to companies within
its industry. While management might not have incurred exactly for future operating expenses, they have
been assumed to reasonable reach comparable profit margins to industry comparables. The management
will operate with minimal expenditures to focus on R&D and commercialization expenses until the
company has sufficient income to support dividend distribution.

Pro Forma Profit and Loss


2016 2017 2018
Revenue $ 1,864,000 $ 2,939,600 $ 4,637,020
Subtotal Cost of Revenue $ 55,920 $ 88,188 $ 139,111
Total Cost of Revenue $ 55,920 $ 88,188 $ 139,111

Gross Margin $ 1,808,080 $ 2,851,412 $ 4,497,909


Gross Margin/Revenue 97% 97% 97%

Expenses
Materials and Supplies $ 48,000 $ 72,000 $ 108,000
Depreciation $ 90,000 $ 135,000 $ 202,500
NEPS Amortization $ - $ - $ -
Product cost $ 244,500 $ 366,750 $ 550,125
Transportation & Mobilization $ 57,425 $ 86,138 $ 129,207
Lease & rent $ 59,795 $ 89,692 $ 134,538
Office & Camp $ 72,000 $ 108,000 $ 162,000
Travel & Entertainment $ 24,000 $ 36,000 $ 54,000
NEPS Capitalisation $ - $ - $ -
Legal and Professional Fees $ 1,115 $ 1,672 $ 2,508
Training Costs $ 12,000 $ 18,000 $ 27,000
Reimbursable Costs $ 34,850 $ 52,275 $ 78,413
Other Expenses $ - $ - $ -
Field Segment Mgmt Costs $ 24,000 $ 36,000 $ 54,000
SINet $ 25,562 $ 38,343 $ 57,515
Segment G&A $ 6,488 $ 9,732 $ 14,597
Research & Engineering Fees $ 14,934 $ 22,401 $ 33,602
Segment in Touch $ 166 $ 250 $ 374
OFS Mgmt/Common Svcs $ 58,751 $ 88,126 $ 132,189
Total Operating Expenses $ 571,720 $ 857,579 $ 1,286,369
Wages & Payroll $ 171,600 $ 257,400 $ 386,100
Depreciation, Amortization & Taxes $ 282,012 $ 395,496 $ 582,306
Net Income $ 580,883 $ 1,038,138 $ 1,788,936
Net Income/Revenue 31% 35% 39%

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Wages & Payroll

Most expenses will be allocated towards development and sales. The employees will be paid competitive
wages so that the company can acquire and retain top talent and compete with large competitors. As the
company grows, it may work in options and bonuses into the salaries, but will focus on a straight full-time
salary with benefits for employees.

Personnel Forecast
Year 1 Year 2 Year 3 Year 4 Year 5
Personnel Count
Sr. Developer 1 2 4 8 16
Developers 6 9 14 16 19
Sales 8 10 12 14 17
Administrative 1 1 1 2 2
Management 0 2 2 2 2

Total Personnel 16 24 32 42 56

Personnel Wage
Sr. Developer $ 100,000 $ 200,000 $ 400,000 $ 800,000 $ 1,600,000
Developers $ 450,000 $ 675,000 $ 1,012,500 $ 1,215,000 $ 1,458,000
Sales $ 280,000 $ 336,000 $ 403,200 $ 483,840 $ 580,608
Administrative $ 35,000 $ 42,000 $ 50,400 $ 60,480 $ 72,576
Management $ - $ 172,000 $ 172,000 $ 172,000 $ 172,000

Personnel Costs
Employer Expenses $ 34,600 $ 44,980 $ 89,960 $ 269,880 $ 809,640
Total Payroll $ 974,163 $ 1,591,863 $ 2,301,749 $ 3,233,467 $ 5,022,423

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Break-Even Analysis

NET UNITS NET REVENUE FIXED COST VARIABLE COST TOTAL COST TOTAL PROFIT
- $0 $773,585 $0 $773,585 -$773,585
2 $120,000 $773,585 $12,000 $785,585 -$665,585
4 $240,000 $773,585 $24,000 $797,585 -$557,585
6 $360,000 $773,585 $36,000 $809,585 -$449,585
8 $480,000 $773,585 $48,000 $821,585 -$341,585
10 $600,000 $773,585 $60,000 $833,585 -$233,585
12 $720,000 $773,585 $72,000 $845,585 -$125,585
14 $840,000 $773,585 $84,000 $857,585 -$17,585
16 $960,000 $773,585 $96,000 $869,585 $90,415
18 $1,080,000 $773,585 $108,000 $881,585 $198,415
20 $1,200,000 $773,585 $120,000 $893,585 $306,415
22 $1,320,000 $773,585 $132,000 $905,585 $414,415
24 $1,440,000 $773,585 $144,000 $917,585 $522,415
26 $1,560,000 $773,585 $156,000 $929,585 $630,415
28 $1,680,000 $773,585 $168,000 $941,585 $738,415
30 $1,800,000 $773,585 $180,000 $953,585 $846,415
32 $1,920,000 $773,585 $192,000 $965,585 $954,415

Breakeven Analysis

$2,500,000
COST-VOLUME-PROFIT

$2,000,000

$1,500,000

$1,000,000

$500,000

$0
20

32
10

12

14

16

18

22

24

26

28

30
0

NET UNITS

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Projected Cash Flow

Pro Forma Cash Flow


2016 2017 2018
Beginning Cash Balance $ - $ 682,896 $ 1,822,218
Cash Inflows
Income from Sales $ 1,864,000 $ 2,939,600 $ 4,637,020
Accounts Receivable $ - $ - $ -
Total Cash Inflows $ 1,864,000 $ 2,939,600 $ 4,637,020

Cash Outflows

Investing Activities
New Fixed Assets Purchases $ - $ - $ -
Inventory Addition to Bal.Sheet $ - $ - $ -
Cost of Sales $ 55,920 $ 88,188 $ 139,111

Operating Activities
Salaries and Wages $ 171,600 $ 257,400 $ 386,100
Fixed Business Expenses $ 773,585 $ 1,160,378 $ 1,740,567
Taxes $ 161,887 $ 276,201 $ 463,901

Financing Activities
Loan Payments $ 18,111 $ 18,111 $ 18,111
Line of Credit Interest $ - $ - $ -
Line of Credit Repayments $ - $ - $ -
Dividends Paid $ - $ - $ -

Total Cash Outflows $ 1,181,104.00 $ 1,800,278.48 $ 2,747,789.73


Cash Flow $ 682,896.00 $ 1,139,321.52 $ 1,889,230.27
Operating Cash Balance $ 682,896.00 $ 1,822,217.52 $ 3,711,447.79
Ending Cash Balance $ 682,896.00 $ 1,822,217.52 $ 3,711,447.79

Year 1 Cash
Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Net Cash Flows Cash Balance

25
Projected Balance Sheet

The projected balance sheet assumes that there are no dividend draws and all cash flow is re-invested
back into the company at the end of the year. The balance sheet does not assume any line of credits or
account receivables that are outstanding at the end of the year and that the company will have paid off
all liabilities. Likewise, it assumes that all accounts will pay within thirty-days and there will be no
delinquency of payments.

Pro Forma Balance Sheet


2016 2017 2018
Assets
Current Assets
Cash $ 682,896 $ 1,822,218 $ 3,711,448
Other Current Assets $ 133,333 $ 66,667 $ -
Total Current Assets $ 816,229 $ 1,888,884 $ 3,711,448

Long-term Assets
Long-term Assets $ 594,000 $ 594,000 $ 594,000
Accumulated Depreciation $ 46,821 $ 93,643 $ 140,464
Total Long-term Assets $ 547,179 $ 500,357 $ 453,536
Total Assets $ 1,363,407 $ 2,389,241 $ 4,164,983

Liabilities and Capital


Current Liabilities
Accounts Payable $ - $ - $ -
Current Borowing $ - $ - $ -
Other Current Liabilities $ 88,525 $ 76,221 $ 63,027
Subtotal Current Liabilities $ 88,525 $ 76,221 $ 63,027

Long-term Liabilities $ 88,525 $ 76,221 $ 63,027


Total Liabilities $ 88,525 $ 76,221 $ 63,027

Common Stock $ 694,000 $ 694,000 $ 694,000


Retained Earnings $ 580,883 $ 1,619,020 $ 3,407,956
Total Capital $ 1,274,883 $ 2,313,020 $ 4,101,956
Total Liabilities and Capital $ 1,363,407 $ 2,389,241 $ 4,164,983

26
Sensitivity Analysis

Best Case Scenario (Revenue Increase by 15% )


2016 2017 2018
Revenue $ 2,143,600 $ 3,380,540 $ 5,332,573
Cost of Goods Sold $ 64,308 $ 101,416 $ 159,977
Gross Margin $ 2,079,292 $ 3,279,124 $ 5,172,596
Gross Margin/Revenue 97% 97% 97%
Operating Expenses $ 773,585 $ 1,160,378 $ 1,740,567
EBIT $ 1,305,707 $ 2,118,746 $ 3,432,029
EBIT/Revenue 61% 63% 64%

Worst Case Scenario (Revenue Decrease by 15% )


2016 2017 2018
Revenue $ 1,584,400 $ 2,498,660 $ 3,941,467
Cost of Goods Sold $ 47,532 $ 74,960 $ 118,244
Gross Margin $ 1,536,868 $ 2,423,700 $ 3,823,223
Gross Margin Revenue 97% 97% 97%
Operating Expenses $ 773,585 $ 1,160,378 $ 1,740,567
EBIT $ 763,283 $ 1,263,322 $ 2,082,656
EBIT/Revenue 48% 51% 53%

Revenue
$6,000,000

$5,000,000

$4,000,000

$3,000,000

$2,000,000

$1,000,000

$-
Year 1 Year 2 Year 3

Best Case Most Likely Worst Case

27
Appendix

Year 1 Profit & Loss


Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Revenue $ 69,000 $ 78,000 $ 88,000 $ 108,000 $ 138,000 $ 148,000 $ 214,000 $ 244,000 $ 194,000 $ 184,000 $ 197,000 $ 202,000
Subtotal Cost of Revenue $ 2,070 $ 2,340 $ 2,640 $ 3,240 $ 4,140 $ 4,440 $ 6,420 $ 7,320 $ 5,820 $ 5,520 $ 5,910 $ 6,060
Total Cost of Revenue $ 2,070 $ 2,340 $ 2,640 $ 3,240 $ 4,140 $ 4,440 $ 6,420 $ 7,320 $ 5,820 $ 5,520 $ 5,910 $ 6,060

Gross Margin $ 66,930 $ 75,660 $ 85,360 $ 104,760 $ 133,860 $ 143,560 $ 207,580 $ 236,680 $ 188,180 $ 178,480 $ 191,090 $ 195,940
Gross Margin/Revenue 97% 97% 97% 97% 97% 97% 97% 97% 97% 97% 97% 97%

Expenses
Materials and Supplies $ 4,000 $ 4,000 $ 4,000 $ 4,000 $ 4,000 $ 4,000 $ 4,000 $ 4,000 $ 4,000 $ 4,000 $ 4,000 $ 4,000
Depreciation $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000
NEPS Amortization $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Product cost $ 3,000 $ 6,000 $ 9,000 $ 15,000 $ 24,000 $ 27,000 $ 30,000 $ 39,000 $ 24,000 $ 21,000 $ 22,500 $ 24,000
Transportation & Mobilization $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 7,571 $ 7,571 $ 7,571 $ 7,571 $ 7,571 $ 7,571
Lease & rent $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 7,966 $ 7,966 $ 7,966 $ 7,966 $ 7,966 $ 7,966
Office & Camp $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 7,000 $ 7,000 $ 7,000 $ 7,000 $ 7,000 $ 7,000
Travel & Entertainment $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000
NEPS Capitalisation $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Legal and Professional Fees $ 93 $ 93 $ 93 $ 93 $ 93 $ 93 $ 93 $ 93 $ 93 $ 93 $ 93 $ 93
Training Costs $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000
Reimbursable Costs $ 2,550 $ 1,700 $ 1,700 $ 1,700 $ 1,700 $ 1,700 $ 1,700 $ 1,700 $ 1,700 $ 1,700 $ 8,500 $ 8,500
Other Expenses $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Field Segment Mgmt Costs $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000
SINet $ 2,130 $ 2,130 $ 2,130 $ 2,130 $ 2,130 $ 2,130 $ 2,130 $ 2,130 $ 2,130 $ 2,130 $ 2,130 $ 2,130
Segment G&A $ 541 $ 541 $ 541 $ 541 $ 541 $ 541 $ 541 $ 541 $ 541 $ 541 $ 541 $ 541
Research & Engineering Fees $ 1,245 $ 1,245 $ 1,245 $ 1,245 $ 1,245 $ 1,245 $ 1,245 $ 1,245 $ 1,245 $ 1,245 $ 1,245 $ 1,245
Segment in Touch $ 14 $ 14 $ 14 $ 14 $ 14 $ 14 $ 14 $ 14 $ 14 $ 14 $ 14 $ 14
OFS Mgmt/Common Svcs $ 4,896 $ 4,896 $ 4,896 $ 4,896 $ 4,896 $ 4,896 $ 4,896 $ 4,896 $ 4,896 $ 4,896 $ 4,896 $ 4,896
Total Operating Expenses $ 36,468 $ 38,618 $ 41,618 $ 47,618 $ 56,618 $ 59,618 $ 83,155 $ 92,155 $ 77,155 $ 74,155 $ 82,455 $ 83,955

EBIT $ 30,462 $ 37,042 $ 43,742 $ 57,142 $ 77,242 $ 83,942 $ 124,425 $ 144,525 $ 111,025 $ 104,325 $ 108,635 $ 111,985
EBIT/Revenue 44% 47% 50% 53% 56% 57% 58% 59% 57% 57% 55% 55%

28
Year 1 Cash Flow
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Cash Received

Revenue
$ 69,000.0 $ 78,000.0 $ 88,000.0 $ 108,000.0 $ 138,000.0 $ 148,000.0 $ 214,000.0 $ 244,000.0 $ 194,000.0 $ 184,000.0 $ 197,000.0 $ 202,000.0
New Current Borrowing
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
New Long-Term Liabilities
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Sale of Other Current Assets
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Sale of Long-Term Assets
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
New Investment Received
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Subtotal Cash Received
$ 69,000.0 $ 78,000.0 $ 88,000.0 $ 108,000.0 $ 138,000.0 $ 148,000.0 $ 214,000.0 $ 244,000.0 $ 194,000.0 $ 184,000.0 $ 197,000.0 $ 202,000.0

Expenditures

Expenditures from Operations


$ 52,838.0 $ 55,258.0 $ 69,539.4 $ 65,158.0 $ 75,058.0 $ 110,765.2 $ 103,874.6 $ 113,774.6 $ 162,021.9 $ 93,974.6 $ 102,664.6 $ 158,066.0
Subtotal Spent on Operations
$ 52,838.0 $ 55,258.0 $ 69,539.4 $ 65,158.0 $ 75,058.0 $ 110,765.2 $ 103,874.6 $ 113,774.6 $ 162,021.9 $ 93,974.6 $ 102,664.6 $ 158,066.0

Additional Cash Spent

Current Borrowing Repay


$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
L-T Liabilities Principal Repay
$ 1,509.3 $ 1,509.3 $ 1,509.3 $ 1,509.3 $ 1,509.3 $ 1,509.3 $ 1,509.3 $ 1,509.3 $ 1,509.3 $ 1,509.3 $ 1,509.3 $ 1,509.3
Purchase Inventory
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Purchase Long-Term Assets
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Dividends
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Cash Spent
$ 54,347.3 $ 56,767.3 $ 71,048.6 $ 66,667.3 $ 76,567.3 $ 112,274.5 $ 105,383.9 $ 115,283.9 $ 163,531.1 $ 95,483.9 $ 104,173.9 $ 159,575.3

Net Cash Flow


$ 14,652.7 $ 21,232.7 $ 16,951.4 $ 41,332.7 $ 61,432.7 $ 35,725.5 $ 108,616.1 $ 128,716.1 $ 30,468.9 $ 88,516.1 $ 92,826.1 $ 42,424.7
Cash Balance
$ 14,652.7 $ 35,885.5 $ 52,836.9 $ 94,169.6 $ 155,602.4 $ 191,327.9 $ 299,944.0 $ 428,660.2 $ 459,129.0 $ 547,645.2 $ 640,471.3 $ 682,896.0

29
References

AAklorbortu, M. (2013, May). Atuabo gas project to propel more growth. Retrieved from XFm News Center:
http://xfmnewscenter.com/news/news.php?cat=Business&id=54074&title=Atuabo+gas+project+to+propel+more+growth

The Economist. (2015, February 25). An oily mess. Retrieved from The Economist: http://www.economist.com/news/business-and-finance/21645086-
nigeria-wants-opec-cut-oil-production-its-pleas-are-unlikely-be-heard-oily-mess

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